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Have taken home loan and death due to corona, what will happen? Whether the loan is forgiven, know what the rule says

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Home Loan Repayment Tips: If a home loan borrower dies due to corona, does the bank waive his loan. In the current situation, it is important to know what is the rule regarding this.

The first responsibility lies with the co-applicant or the guarantor.

What If Home Loan borrower dies: Due to Corona, thousands of people are dying on a daily basis. Most of the dead are young and many of them were the only bread earners for their families. In such a situation, after the death of these people, the sky of disaster has broken on the family. In today’s era, everyone first buys a house for himself after earning and a large part of the salary goes out in the form of home loan EMI.

In this era of pandemic, if a home loan borrower dies, what will the bank do, what should his family do, is that loan forgiven, if the loan is not forgiven then how does the bank recover that loan, Answers to all these questions are necessary. According to the rules, if a home loan borrower dies, it does not affect the bank’s loan. After the death of the borrower, the responsibility of repaying the loan rests with the co-applicant or the guarantor. If both are not there, the bank will approach the person who will be the legal heir to the borrower’s property. Through all these avenues, if the bank feels that it is not possible to repay its loan, then it has a legal right to take possession of the property, then sell it and recover its loan.

The bank never waives its loan

Overall, the loan of the bank is not waived under any circumstances. There is no such law in our country that waives off the loan on the death of the borrower. Therefore, if you also have any such misunderstanding in your mind, then first of all clear it. This rule applies to all types of bank loans.

what should family members do

Now the big question arises that in the event of the death of the borrower, what path should the family members take. If you have a good relationship with the bank regarding loan repayment, then you can get relief. Therefore, in the event of the death of the borrower, first inform the bank about it. The bank will understand your helplessness and you may get some time to repay the loan.

How to do the repayment

If the borrower’s wife is getting any benefit from the ancestral property or gets a pension, then she has the first responsibility to repay the loan. If the property is divided equally between children and wife, then the bank asks you the question who will do the loan repayment. In many cases, the bank may also give you the option of loan settlement. However, this is possible when the loan amount is low or you have a good relationship with the bank and a good payment history. Loan settlement depends on many factors.

You can get rid of the hassle with these tips

Experts advise that after the death of the borrower, the problem of repayment of the loan becomes very serious. In such a situation, there is a need to show wisdom ahead of time. Investment consultants recommend that you get life insurance for yourself for the amount of home loan you take. It is also called term insurance. In this situation, if a borrower dies, the loan can be paid in lump sum with the money received from the insurance company.

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Bhagyashree Soni
Bhagyashree Soni is a software engineer with soft writing skills. She is a degree holder from the International School of Entrepreneurial Leadership. She has been a state-level badminton champion and chess player. A woman with a forthright attitude enjoys her writing passion as her chosen career. Writing in the context of feminism, social-cause and entreprenurship is her forte.
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